United Pub. Workers, AFSCME, Local 636, AFL-CIO v. Abercrombie
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United Public Workers, AFSCME, Local 646, AFL-CIO (“UPW”) filed an action on behalf of the employees it represented, alleging (1) then-Governor Lingle and members of her administration retaliated against UPW members for filing a lawsuit opposing her statewide furlough plan; and (2) the State was unlawfully privatizing positions customarily performed by civil servants under the merit system. The circuit court dismissed the complaint based on a lack of jurisdiction. The intermediate court of appeals (ICA) vacated the circuit court’s judgment and remanded with instructions to stay the action pursuant to the primary jurisdiction doctrine so the parties could pursue appropriate administrative remedies before the Hawaii Labor Relations Board (HLRB). The Supreme Court primarily affirmed, holding (1) the ICA did not err in concluding that the primary jurisdiction doctrine was applicable to UPW’s retaliation claims because the claims required the resolution of issues that have been placed within the special competence of the HLRB, and that a stay, rather than a dismissal, was appropriate under the circumstances; and (2) the primary jurisdiction doctrine did not apply to UPW’s privatization claims, and therefore, the circuit court erred in dismissing these claims, and the ICA erred in referring the claims to the HLRB. Remanded.
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Electronically Filed
Supreme Court
SCWC-12-0000505
28-FEB-2014
01:35 PM
IN THE SUPREME COURT OF THE STATE OF HAWAI#I
---o0o---
UNITED PUBLIC WORKERS, AFSCME, LOCAL 646, AFL-CIO,
Petitioner/Plaintiff-Appellant,
vs.
NEIL ABERCROMBIE,1 Governor, State of Hawai#i; Kalbert K. Young,
Director, Department of Budget and Finance, State of Hawai#i;
Barbara A. Krieg, Director, Department of Human Resources
Development, State of Hawai#i; Ted Sakai, Director, Department of
Public Safety, State of Hawai#i,2
Respondents/Defendants-Appellees.
SCWC-12-0000505
CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
(CAAP-12-0000505; CIV. NO. 09-1-2145-09 PWB)
FEBRUARY 28, 2014
RECKTENWALD, C.J., NAKAYAMA, AND McKENNA, JJ., WITH ACOBA, J.,
CONCURRING AND DISSENTING, WITH WHOM POLLACK, J. JOINS
1
During the pendency of this appeal, Neil Abercrombie, Governor of
the State of Hawai #i, succeeded Linda Lingle. Thus, pursuant to Hawai #i Rules
of Appellate Procedure (HRAP) Rule 43(c), Abercrombie has been substituted
automatically for Lingle in this case.
2
Kalbert K. Young, Director, Department of Budget and Finance,
State of Hawai #i; Barbara A. Krieg, Director, Department of Human Resources
Development, State of Hawai #i; and Ted Sakai, Director, Department of Public
Safety, State of Hawai #i have been substituted as parties to this appeal
pursuant to HRAP Rule 43(c). UPW also listed Linda Lingle’s Chief Policy
Advisor, Linda Smith, as a Defendant. This title does not exist in Governor
Abercrombie’s current cabinet.
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OPINION OF THE COURT BY McKENNA, J.
I.
Introduction
This case concerns the application of the primary
jurisdiction doctrine by the Intermediate Court of Appeals
(“ICA”) to a lawsuit filed in circuit court by the United Public
Workers, AFSCME, Local 646, AFL-CIO (“UPW”), on behalf of the
employees (“Employees”) it represents.
UPW presents the
following question: “Whether the ICA erred by ordering the
circuit court to stay this case under the doctrine of ‘primary
jurisdiction’ even though the claims are within the original
jurisdiction of the circuit courts and do not present issues
committed to the specialized administrative expertise of the
Hawai#i Labor Relations Board.”
UPW sought relief in the Circuit Court of the First
Circuit (“circuit court”) alleging that then-Governor Lingle and
members of her administration retaliated against UPW members for
filing a lawsuit opposing her 2009 statewide furlough plan.
In
addition, UPW alleged that the State was unlawfully privatizing
positions historically and customarily performed by civil
servants under the merit system.
UPW’s retaliation claims were
brought under (1) the Hawai#i Whistleblowers’ Protection Act
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(“HWPA”),3 and (2) article I, section 4 of the Hawai#i
Constitution (“Free Speech Clause” or “Free Speech retaliation
claim”)4.
UPW’s privatization claims were brought under (1)
article XVI, section 1 of the Hawai#i Constitution,5 and (2)
Hawai#i Revised Statutes (“HRS”) § 76-43 (Supp. 2010).6
We hold that UPW’s retaliation claims are originally
cognizable in the circuit courts; however, the ICA correctly
ruled that pursuant to the doctrine of primary jurisdiction, the
enforcement of UPW’s retaliation claims requires the resolution
of issues that have been placed within the special competence of
3
In relevant part, the HWPA prohibits an employer from discharging,
threatening, or otherwise discriminating against an employee regarding the
employee’s compensation, terms, conditions, location, or privileges because:
(1) The employee, or a person acting on behalf of the
employee, reports or is about to report to the employer, or
reports or is about to report to a public body, verbally or in
writing, a violation or a suspected violation of . . . [a]
law, rule, ordinance, or regulation, adopted pursuant to law
of this State, a political subdivision of this State, or the
United States[.]
HRS § 378-62 (2011).
4
“No law shall be enacted respecting an establishment of religion,
or prohibiting the free exercise thereof, or abridging the freedom of speech
or of the press or the right of the people peaceably to assemble and to
petition the government for a redress of grievances.” Haw. Const. art. I,
§ 4.
5
“The employment of persons in the civil service, as defined by
law, of or under the State, shall be governed by the merit principle.” Haw.
Const. art. XVI, § 1.
6
“When it is necessary to release employees due to lack of work,
lack of funds, or other legitimate reasons, employees with permanent
appointments in civil service positions shall have layoff rights. Layoffs
shall be made in accordance with procedures negotiated under chapter 89 or
established under chapter 89C, as applicable.” HRS § 76-43.
3
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the Hawai#i Labor Relations Board (“HLRB”) under HRS Chapter 89.
The ICA also correctly ruled that the circuit court should have
stayed rather than dismissed the UPW’s retaliation claims pending
the HLRB’s determination of issues within UPW’s claims that were
within the HLRB’s special competence.
We hold that pursuant to
Konno v. County of Hawai#i, 85 Hawai#i 61, 937 P.2d 397 (1997),
however, the primary jurisdiction doctrine does not apply to
UPW’s privatization claims.
Accordingly, we affirm the ICA’s judgment on appeal
vacating the circuit court’s “Order Granting Defendants’ Second
Motion to Dismiss Plaintiff’s Complaint Filed September 16, 2009”
and May 15, 2012 Final Judgment.
We disagree, however, with the
ICA’s remand instructions to the extent that it ordered the
circuit court to stay UPW’s privatization claims.
We agree that
the circuit court must stay the retaliation claims pursuant to
the primary jurisdiction doctrine, but the primary jurisdiction
doctrine does not apply to UPW’s privatization claims; therefore,
we instruct the circuit court to proceed consistent with this
opinion.
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II.
A.
Background
Factual Background7
1.
Attempted Furlough and Injunction
On June 1, 2009, then-Governor Linda Lingle announced
that state employees would be furloughed three days per month for
two years to allow the state to avoid having to lay off
employees.
On June 16, 2009, UPW filed a complaint in the
circuit court (“Furlough Lawsuit”) “for violations of state law
under Article XIII, Section 2,8 and other State Constitution
provisions,” and sought injunctive relief to enjoin the state
from implementing the furloughs.9
On July 2, 2009, the circuit
court10 concluded that the defendants had violated the State
Constitution by attempting to impose the furloughs without
collective bargaining, and granted UPW’s injunction, enjoining
the unilateral statewide furloughs.
2.
Reduction in Force Announcement
Soon thereafter, on July 17, 2009, Marie Laderta
(Defendant Laderta), Director of the Department of Human
7
These facts are from UPW’s complaint to the circuit court and are
undisputed by the Defendants.
8
“Persons in public employment shall have the right to organize for
the purpose of collective bargaining as provided by law.” Haw. Const. art.
XIII, § 2.
9
On June 18, 2009, UPW amended its complaint restating its claims
for violations of the state constitution.
10
The Honorable Karl K. Sakamoto presided.
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Resources Development, notified various public employees that
their names would be included on layoff lists.
UPW employees were on the list.
Approximately 216
On July 23, 2009, Clayton Frank
(“Defendant Frank”), Director of the Department of Public Safety,
notified UPW of an impending layoff due to the closure of the
Kulani Correctional Facility.
On August 4, 2009, Defendant
Lingle announced a decision to implement a reduction in force
(“RIF”) that would discharge approximately 1,100 State employees.
3.
Privatization
UPW alleged that on June 8, 2009, UPW requested that
Defendants Lingle and Laderta terminate all contracts for
services that have historically and customarily been performed by
civil servants in bargaining units 1 and 10.
UPW alleged that
the Defendants refused.11
UPW also alleged that Defendants refused to negotiate
over the (1) decision to close Kulani Correctional Facility, and
(2) implementation of that decision.
On August 3, 2009,
Defendant Frank informed the inmates at Kulani of their
relocation by the end of September 2009.
UPW alleged that the
Department of Public Safety then subcontracted with private
11
UPW does not provide any examples of Defendants’ alleged unlawful
privatization of civil service positions other than Kulani Correctional
Facility.
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contractors to house approximately 2,000 Hawai#i inmates on the
mainland.
B. Procedural History
1.
HLRB Prohibited Practice Complaint
On August 27, 2009, UPW filed an amended complaint with
the HLRB (“HLRB Complaint”) against Defendants Laderta, Lingle,
and Frank (“Defendants”).12
The HLRB Complaint alleged a number
of violations under HRS § 89-13(a) (“prohibited practice
violations”).
In relevant part, the HLRB Complaint alleged that
the Defendants: (1) violated HRS § 89-13(a)(1) when Defendant
Lingle interfered, restrained, and coerced employees in their
exercise of statutory and constitutional rights by threatening
mass layoffs and the shutdown of programs; (2) violated HRS § 8913(a)(3) when Defendants discriminated regarding terms and
conditions of employment to discourage membership in an employee
organization through threats to job security, implementation of
RIF, layoffs, and discharges; (3) violated HRS § 89-13(a)(5) by
refusing to bargain collectively in good faith over furloughs as
an alternative to layoffs, and for unilaterally implementing
procedures and criteria for RIF displacements, and discharges of
bargaining unit employees; (4) violated HRS § 89-13(a)(7) by
refusing to comply with provisions of Chapter 89, including HRS
12
The original complaint contained “prohibited practice” allegations
against Defendant Laderta only.
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§§ 89-313 and 89-9(a)14, (c)15, and (d)16; and (5) violated HRS §
13
HRS § 89-3 (Supp. 2008) states:
Employees shall have the right of self-organization and the
right to form, join, or assist any employee organization for
the purpose of bargaining collectively through
representatives of their own choosing on questions of wages,
hours, and other terms and conditions of employment,
including retiree health benefit contributions, and to
engage in lawful, concerted activities for the purpose of
collective bargaining or other mutual aid or protection,
free from interference, restraint, or coercion. An employee
shall have the right to refrain from any or all of such
activities, except for having a payroll deduction equivalent
to regular dues remitted to an exclusive representative as
provided in section 89-4.
14
HRS § 89-9(a) (Supp. 2008) states:
The employer and the exclusive representative shall meet at
reasonable times, including meetings sufficiently in advance
of the February 1 impasse date under section 89-11, and
shall negotiate in good faith with respect to wages, hours,
the amounts of contributions by the State and respective
counties to the Hawaii employer-union health benefits trust
fund or voluntary employees’ beneficiary association trust
to the extent allowed in subsection (e), and other terms and
conditions of employment that are subject to collective
bargaining and that are to be embodied in a written
agreement as specified in section 89-10, but the obligation
does not compel either party to agree to a proposal or make
a concession; provided that the parties may not negotiate
with respect to cost items as defined by section 89-2 for
the biennium 1999 to 2001, and the cost items of employees
in bargaining units under section 89-6 in effect on June 30,
1999, shall remain in effect until July 1, 2001.
15
HRS § 89-9(c) (Supp. 2008) states:
Except as otherwise provided in this chapter, all matters
affecting employee relations, including those that are, or
may be, the subject of a rule adopted by the employer or any
director, shall be subject to consultation with the
exclusive representatives of the employees concerned. The
employer shall make every reasonable effort to consult with
exclusive representatives and consider their input, along
with the input of other affected parties, prior to effecting
changes in any major policy affecting employee relations.
16
HRS § 89-9(d) (Supp. 2008) prohibits negotiation of matters of
classification, reclassification, benefits of but not contributions to the
Hawai #i employer-union health benefits trust fund or voluntary employees’
beneficiary association trust; recruitment; examination; initial pricing; and
retirement benefits except as provided in HRS § 88-8(h) (Supp. 2008). In
addition, this section prohibits agreeing on any proposals that would be
inconsistent with the merit principle, the principle of equal pay for equal
(continued...)
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89-13(a)(8) by violating the terms of the unit 1 and 10
collective bargaining agreements.
The HLRB entered its Findings of Fact and Conclusions
of Law on October 23, 2009.
In relevant part, the HLRB found:
(1) the record indicated that the State at all relevant times was
facing a severe fiscal crisis that required it to balance its
budget in the face of ever-increasing revenue shortfalls; (2)
Defendant Lingle’s consideration of layoffs of public employees
as a means of addressing the predicted revenue shortfall preceded
the filing of grievances or civil lawsuits by UPW; (3) the State
had presented a legitimate, non-discriminatory, and nonretaliatory reason for its decision to lay off workers, and the
Union had not presented evidence to rebut the State’s assertions
(the decline of revenues) or demonstrated that the stated reason
was merely pretextual.
2.
Circuit Court Complaint
Before the HLRB had issued its findings, UPW filed a
complaint in the circuit court (“First Circuit Complaint”) on
September 16, 2009, alleging that Defendants’ actions: (1)
constituted acts of retaliation, reprisal, and intimidation in
violation of the HWPA; (2) violated Employees’ rights guaranteed
16
(...continued)
work pursuant to section 76-1, or agreeing on proposals that would interfere
with a number of rights and obligation of a public employer listed in HRS
§§ 89-9(d)(1)-(d)(8).
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by the Free Speech Clause; (3) violated the merit principle17
mandated by article XVI, section 1 of the Hawai#i Constitution;
and (4) violated Employees’ rights under HRS § 76-43 by “refusing
to negotiate the criteria, procedures, timing, and manner of
handling mass layoffs for reasons other than ‘lack of work’ or
‘lack of funds’ with UPW prior to unilateral implementation of
the layoffs, reductions in force, and discharges of unit 1 and 10
17
UPW alleged the following regarding Defendants’ violations of
merit principles:
89. In Konno v. County of Hawai#i, 85 Hawai #i 61, 937
P.2d 397 (1997), the Hawaii Supreme Court held that the
contracting out or privatization of services which have
historically and customarily been performed by civil servants
represented by UPW violates the merit principle.
90. On November 20, 2002 in the Matter of the
Arbitration Between the United Public Workers, AFSCME, Local
646, AFL-CIO v. County of Hawaii, contracting out or
privatization of bargaining unit work was found to violate,
inter alia, the constitutional merit principle.
Said award
was confirmed by the circuit court in S.P. No. 02-1-0514 and
constitutes a final judgment which is binding on all public
employers who are parties to the unit 1 and 10 collective
bargaining agreements.
91. The services performed by bargaining unit 1 and 10
employees in positions which are being abolished by the
Defendants have historically and customarily been performed by
civil servants under the merit system.
92. On June 8, 2009 Defendants Lingle and Laderta were
requested by UPW to terminate all contracts for services which
have historically and customarily been performed by civil
servants in bargaining units 1 and 10 no later than June 30,
2009, and to cease and desist from undermining the job
security of civil servants contrary to the merit principle.
93. On and after June 30, 2009 Defendants have refused
to terminate contracts which are contrary to public policy in
contravention of Article XVI, Section 1 of the Hawaii State
Constitution.
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employees.”18
18
UPW alleged the following regarding Defendants’ violations of
civil service laws:
96. HRS Chapters 76 and 77 require that all blue collar,
non-supervisory positions and institutional, health and
correctional positions within the State of Hawaii, to be
governed by the merit principles and that employees be hired
and retained in accordance with the provisions thereof, unless
specifically exempt under HRS § 76-16.
97. It is a fundamental requirement of the merit
principle under Section 76-1, HRS, that civil servants be
afforded reasonable job security.
98. HRS § 76-16 defines the merit system as follows:
§76-16 Civil service and exemptions.
. . .
(b) The civil service to which this chapter applies
shall comprise all positions in the State now existing or
hereafter established and embrace all personal services
performed for the State, except the following:
. . .
(2) Positions filled by persons employed by contract
where the director of human resources development has
certified that the service is special or unique or is
essential to the public interest and that, because of
circumstances surrounding its fulfillment, personnel to
perform the service cannot be obtained through normal civil
service recruitment procedures. Any such contract may be for
any period not exceeding one year; . . .
99. At no time has Defendant Laderta certified pursuant
to Section 76-16(b)(2), HRS, for exemption the services
performed by private contractors or otherwise authorized
contracting out in units 1 and 10.
100.
The
contracting
out
and
privatization
of
corrections work by Defendants is not justified under Section
76-16, HRS, when unit 1 and 10 employees are laid off,
displaced, discharged, and subject to other adverse actions by
Defendants.
101. Section 76-43, HRS, affords to employees with
permanent appointments in civil service positions rights under
the civil service laws as follows: Whenever it is necessary to
release employees due to lack of work, lack of funds, or other
legitimate reasons, employees with permanent appointments in
civil service positions shall have layoff rights. Layoffs
shall be made in accordance with procedures negotiated under
chapter 89 or established under chapter 89C, as applicable.
102. Defendants violated the rights of employees under
(continued...)
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Defendants then filed a Motion to Dismiss the First
Circuit Complaint on the grounds that: (1) UPW did not identify
any “employees” protected by HWPA, and UPW is not an employee
itself; (2) UPW’s complaints did not include any facts that could
“underlie a freestanding constitutional claim premised on access
to the courts”; (3) this court in Konno v. County of Hawai#i, 85
Hawai#i 61, 70, 937 P.2d 397, 406 (1997) had already held, “the
Hawai#i Constitution does not establish an independently
enforceable right to the protection of merit principles”; and (4)
UPW’s allegations under HRS § 76-43 are premised on the
requirements of Chapter 89, Hawaii’s collecting bargaining law;
therefore, the HLRB had exclusive original jurisdiction over such
complaints.
The circuit court19 denied Defendants’ motion in its
entirety.
Two years later, on September 14, 2011, Defendants
filed a second Motion to Dismiss in the circuit court on the
basis that this court had recently clarified that the HLRB had
18
(...continued)
Section 76-43, HRS, by refusing to negotiate the criteria,
procedures, timing, and manner of handling mass layoffs for
reasons other than “lack of work” or lack of “funds” with UPW
prior to unilateral implementation of the layoffs, reductions
in force, and discharges of unit 1 and 10 employees.
103. Defendants, by the foregoing acts, have abrogated
the Civil Service Laws of the State of Hawaii.
19
The Honorable Derrick H.M. Chan presided.
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“exclusive original jurisdiction over the controversy” in Hawai#i
Government Employees Association v. Lingle (“HGEA”), 124 Hawai#i
197, 239 P.3d 1 (2010).20
On January 17, 2012, this court
published Hawai#i State Teachers Association v. Abercrombie
(“HSTA”), 126 Hawai#i 318, 271 P.3d 613 (2012),21 which further
clarified and affirmed our decision in HGEA.
On February 15, 2012, the circuit court22 granted
Defendants’ second Motion to Dismiss and dismissed all claims
based on its conclusion that the circuit court lacked
jurisdiction.
The circuit court found that the underlying facts
in UPW’s First Circuit Complaint essentially mirrored those
alleged by UPW in the “prohibited practice” claims before the
HLRB.
It concluded that HRS § 89-14 provided HLRB with exclusive
original jurisdiction over controversies implicating prohibited
practices, and therefore, “it would be wholly inconsistent with
20
In HGEA, two unions sought relief under both statutory and
constitutional provisions to enjoin the Governor from unilaterally imposing
furloughs or new layoff procedures on public employees. This court held that
the HLRB had exclusive original jurisdiction over the statutory issues raised
in the unions’ complaint, and that the circuit court had erred in addressing
the constitutional issues without first giving the HLRB the opportunity to
address the statutory questions.
21
In HSTA, the teachers union brought an action alleging that the
governor’s furlough plan violated state constitutional rights. This court
held that the dispute concerning whether the state constitutional provision
granting public employees the right to unionize permitted the Governor to
unilaterally impose furloughs, was within the exclusive jurisdiction of the
HLRB.
22
The Honorable Patrick W. Border presided.
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HLRB’s exclusive, original jurisdiction for the First Circuit to
hear the same underlying factual disputes and allegations and
create the possibility of inconsistent judgments.”
The circuit court also concluded that the statutory
scheme required that HLRB be given the opportunity to address the
allegations in UPW’s prohibited practice complaint.
The circuit
court would then review HLRB’s decision in its appellate
capacity.
The circuit court also concluded that the additional
claims raised in the First Circuit Complaint, not included in the
HLRB complaint, were essentially prohibited practices, and stated
that it lacked “primary subject matter jurisdiction” over those
claims because exclusive, original jurisdiction rested with the
HLRB.
Finally, to the extent that the First Circuit Complaint
raised constitutional and statutory claims over which the HLRB
lacked subject matter jurisdiction, the circuit court concluded
that under HGEA, the HLRB had to be given the opportunity to
resolve the claims within its jurisdiction before a court could
consider the constitutional claims in its appellate capacity.23
The circuit court further concluded that the claims could be
rendered moot if HLRB ruled against UPW on the key factual and
23
The circuit court did not comment on whether its decision was
based on the primary jurisdiction doctrine or exhaustion of administrative
remedies.
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legal questions of whether the Governor’s reason for instituting
layoffs were: (1) premised upon a true fiscal exigency, and were
within her unilateral management powers under HRS Chapter 89, or
2) premised upon an improper desire to retaliate against UPW
members for engaging in conduct specifically protected by HRS
Chapter 89.
As for the “statutory claims,” the circuit court
concluded that “allowing parallel litigation in the circuit court
while the HLRB proceeding was ongoing would both undercut the
HLRB’s exclusive original jurisdiction and create a risk of
inconsistent judgments.”
The circuit court then dismissed all of
UPW’s claims based on a lack of jurisdiction.
D.
ICA Memorandum Opinion
The ICA issued a Memorandum Opinion vacating the
circuit court’s judgment dismissing UPW’s First Circuit
Complaint, and remanded the case with instructions to stay the
action pursuant to the primary jurisdiction doctrine, so that the
parties could pursue appropriate administrative remedies before
the HLRB.
UPW v. Lingle, No. CAAP-12-0000505 (Haw. App. June 18,
2013) (mem.).
The ICA essentially agreed with the circuit court that
the controversy presented to the circuit court raised issues
within the HLRB’s exclusive jurisdiction over prohibited practice
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controversies.
The ICA concluded that UPW’s statutory claims
could be raised directly in the circuit court, but that the
matter should be referred to the HLRB under the doctrine of
primary jurisdiction.
UPW, mem. op. at 4.
Therefore, the ICA
concluded that the circuit court had erred in dismissing the
action because a stay, rather than dismissal without prejudice,
was appropriate under the circumstances.
The ICA concluded that UPW’s First Circuit Complaint
alleged conduct that was specifically defined as prohibited
practices under HRS § 89-13.
UPW, mem. op. at 8.
The ICA
concluded that UPW’s layoff and privatization claims were based
on allegations that Defendants had engaged in the prohibited
practices of: (1) discriminating against UPW by laying off
employees in retaliation for engaging in protected union
activities and filing the Furlough Lawsuit; (2) discriminating
against UPW members by failing to take corrective action to
terminate current private contractors while implementing the
layoff of UPW members; and (3) refusing to bargain collectively
regarding the layoff procedures and the privatization.
Id.
The
ICA thus reasoned that UPW’s layoff and privatization claims were
essentially prohibited practice claims.
Id.
The ICA reasoned that this court’s decisions in HGEA
and HSTA reflect a concern that, “when a plaintiff presents to
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the circuit court a controversy that is identical to one which
could have and should have been presented to the HLRB, the
circuit court’s exercise of jurisdiction necessarily involves a
risk of interfering with the HLRB’s exclusive jurisdiction over
prohibited practice controversies.”
Id.
The ICA concluded, “UPW correctly asserts that its
statutory claims could be raised directly in the circuit court.”
The ICA cited Konno for this assertion, indicating that it was
referring to the civil service claims under HRS Chapter 76.
Id.
The ICA held that the doctrine of primary jurisdiction applies
when a court and an agency have concurrent original jurisdiction
to decide issues which have been placed within the special
competence of an administrative agency; therefore, the doctrine
of primary jurisdiction applied to UPW’s “statutory claims.”
UPW, mem. op. at 9.
The ICA concluded that under the doctrine of
primary jurisdiction, however, dismissal is only appropriate if
the parties would not be unfairly disadvantaged.
Id.
Because
the statute of limitations could prevent UPW from refiling its
claims at the conclusion of the HLRB proceedings, the ICA
concluded that the proper remedy was to stay the case pending the
outcome of the administrative process.
III.
Id.
Standard of Review
The existence of jurisdiction is a question of law that
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we review de novo under the right/wrong standard.
Hawai#i at 183, 111 P.3d at 592.
HGEA, 107
Accordingly, a court’s decision
to invoke the primary jurisdiction doctrine is reviewed de novo
as well.
Pac. Lightnet, Inc. v. Time Warner Telecom, Inc., No.
SCWC-28948, slip op. at 38 (Haw. Dec. 18, 2013).
“If the court
determines that the primary jurisdiction doctrine applies, the
court, in its discretion, may determine whether to stay the
litigation or dismiss without prejudice.”
IV.
A.
Id.
Discussion
The Primary Jurisdiction Doctrine
UPW asserts in its Application that HLRB’s exclusive
original jurisdiction is limited to prohibited practices related
to collective bargaining: “HGEA v. Lingle and HSTA v. Abercrombie
decisions were narrow rulings that related only to the
constitutional right to collective bargaining, which is
implemented by HRS Chapter 89.”
UPW argues that the decisions
“did not set out a broad rule that any claim that involves facts
that could also make out a ‘prohibited practice’ must be
presented to the HLRB even if the plaintiff is not alleging a
prohibited practice but a violation of other statutory or
constitutional provisions.”
We agree with UPW to the extent that it argues that
HGEA and HSTA were narrow rulings relating only to claims
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alleging violations of the rights to collective bargaining.
In
HGEA, the plaintiffs based their request for relief on HRS
Chapter 89 and the constitutional right to collective bargaining
under article XIII, section 2 of the Hawai#i Constitution.
Hawai#i at 200, 239 P.3d at 4.
124
We concluded that although the
plaintiffs’ complaint did not expressly use the words “prohibited
practice,” a prohibited practice could be logically inferred
because the plaintiffs’ complaint essentially alleged that in
instituting a unilateral statewide furlough plan, Defendant
Lingle had committed a prohibited practice when she refused to
bargain collectively in good faith as required by HRS Chapter 89.
Accordingly, we held that the HLRB had exclusive jurisdiction
over the plaintiffs’ claims pursuant to HRS § 89-14.
Unlike the plaintiffs in HGEA, the plaintiffs in HSTA
deleted all references to HRS Chapter 89 in their complaint and
based their request for relief solely on the constitutional right
to collective bargaining under article XIII, section 2 of the
Hawai#i constitution.
HSTA, 126 Hawai#i at 322, 271 P.3d at 617.
Nonetheless, we reiterated our holding in HGEA and emphasized
that the legislative purpose of having the administrative agency
with expertise in these matters decide them in the first instance
is “frustrated if the HLRB’s jurisdiction can be defeated by
characterizing issues that fall within the scope of HRS Chapter
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89 as constitutional claims and then addressing them directly to
the circuit court.”
HSTA, 126 Hawai#i at 322, 271 P.3d at 617
(citing HGEA, 124 Hawai#i at 208, 239 P.3d at 12).
In the instant case, however, UPW’s claims are based on
the HWPA and the Free Speech Clause, both of which are within the
original jurisdiction of the circuit court and do not facially
involve violations of the constitutional or statutory rights to
collective bargaining.
Thus, HGEA and HSTA do not control the
narrow question presented in the instant application, which
essentially requires that we determine whether the primary
jurisdiction doctrine applies to UPW’s claims.
1.
History of the Primary Jurisdiction Doctrine
The primary jurisdiction doctrine originated from the
United States Supreme Court’s decision in Texas & Pacific Railway
Co. v. Abilene Cotton Oil Co. (“Abilene”), 204 U.S. 426 (1907).
In Abilene, a shipper sued a carrier in state court claiming that
a carrier’s interstate freight rate was “unjust and
unreasonable.”
204 U.S. at 433.
The United States Supreme Court
considered whether, consistent with the Interstate Commerce Act,
the court had power “to grant relief upon the finding that the
rate charged for an interstate shipment was unreasonable,
although such rate was the one fixed by the duly published and
filed rate sheet, and when the rate had not been found to be
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unreasonable by the Interstate Commerce Commission.”
Abilene,
204 U.S. at 432.
The Court opined that if the power to originally hear
complaints on the subject existed in both courts and the
Commission, there might be a divergence between the action of the
Commission and the decision of a court.
204 U.S. at 441.
The
Court stated, “the established schedule might be found reasonable
by the Commission in the first instance and unreasonable by a
court acting originally, and thus, a conflict would arise which
would render the enforcement of the act impossible.”
441.
204 U.S. at
Accordingly, the Court held, “a shipper seeking reparation
predicated upon the unreasonableness of the established rate
must, under the act to regulate commerce, primarily invoke
redress through the Interstate Commerce Commission, which body
alone is vested with power originally to entertain proceedings
for the alteration of an established schedule[.]”
204 U.S. at
448 (emphasis added).
In United States v. Western Pacific Railroad Company
(“Western Pac. R.R.”), 352 U.S. 59 (1956), the United States
Supreme Court further refined the doctrine of primary
jurisdiction.
Presented with the question of whether the Court
of Claims had correctly allocated the issues in a suit between
the jurisdiction of the Interstate Commerce Commission and that
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of the court, i.e., whether the court properly applied the
primary jurisdiction doctrine, the Court explained that the
primary jurisdiction doctrine was concerned with promoting proper
relationships between courts and administrative agencies charged
with particular regulatory duties.
352 U.S. at 63-64.
The Court
held that unlike the exhaustion principle, which applies when a
claim is cognizable in the first instance by an administrative
agency alone, primary jurisdiction:
applies where a claim is originally cognizable in the
courts, and comes into play whenever enforcement of the
claim requires the resolution of issues which, under a
regulatory scheme, have been placed within the special
competence of an administrative body; in such a case the
judicial process is suspended pending referral of such
issues to the administrative body for its views .
Western Pac. R.R., 352 U.S. at 63-64 (citing General Am. Tank Car
Corp. v. El Dorado Terminal Co., 308 U.S. 422, 433 (1980)
(holding that the District Court had jurisdiction over the action
in assumpsit; however, in light of the provisions of the
Interstate Commerce Act, “it should not have proceeded to
adjudicate the rights and liabilities of the parties” in the
absence of a decision by the Interstate Commerce Commission with
respect to the validity of the practice involved)).
Thus, the doctrine of primary jurisdiction arose from a
concern that an established rate schedule could be found
reasonable by the agency tasked with this determination, but
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unreasonable by a court, thereby triggering a conflict that could
render the enforcement of the Interstate Commerce Act impossible.
Abilene, 204 U.S. at 441.
The doctrine was later refined to
include the principle that in cases raising issues of fact not
within the conventional experience of judges or requiring the
exercise of administrative discretion, agencies created by
Congress for regulating the subject matter should not be passed
over.
Western Pac. R.R., 352 U.S. at 77; Far East Conference v.
United States, 342 U.S. 570, 574 (1952) (holding that the Federal
Maritime Board’s primary jurisdiction over matters concerning the
Shipping Act of 1916 precluded the District Court for New Jersey
from passing on the merits of the lawsuit, which was brought
under the Sherman Anti-Trust Act).
2.
Primary Jurisdiction in Hawai#i
This court adopted the doctrine of primary jurisdiction
directly from Western Pac. R.R., holding that primary
jurisdiction applied “where a claim is originally cognizable in
the courts, and comes into play whenever enforcement of the claim
requires the resolution of issues which, under a regulatory
scheme, have been placed within the special competence of an
administrative body.”
Kona Old Hawaiian Trails Group v. Lyman,
69 Haw. 81, 93, 734 P.2d 161, 168 (1987) (citing Western Pac.
R.R., 352 U.S. at 63-64).
We concluded, “[w]hen this happens,
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the judicial process is suspended pending referral of such issues
to the administrative body for its views.”
Pac. R.R., 352 U.S. at 64).
Id. (citing Western
We opined, “[i]n effect, the courts
are divested of whatever original jurisdiction they would
otherwise possess.
And ‘even a seemingly contrary statutory
provision will yield to the overriding policy promoted by the
doctrine.’”
69 Haw. at 93, 734 P.2d at 168-69 (citing B.
Schwartz, Administrative Law § 8.24, at 488 (2nd ed. 1984)
(emphasis omitted)).
In Kona Old, the plaintiffs’ invoked the circuit
court’s jurisdiction pursuant to HRS §§ 91-14(a),24 205A-6,25 and
24
HRS § 91-14(a) (1985) stated:
Any person aggrieved by a final decision and order in a
contested case or by a preliminary ruling of the nature that
deferral of review pending entry of a subsequent final
decision would deprive appellant of adequate relief is
entitled to judicial review thereof under this chapter; but
nothing in this section shall be deemed to prevent resort to
other means of review, redress, relief, or trial de novo,
including the right of trial by jury, provided by law.
25
HRS § 205A–6 (1985) read in pertinent part:
(a) Subject to chapters 661 and 662, any person or agency
may commence a civil action alleging that any agency:
(1) Is not in compliance with one or more of the objectives,
policies, and guidelines provided or authorized by this
chapter within the special management area and the waters
from the shoreline to the seaward limit of the State’s
jurisdiction; or
(2) Has failed to perform any act or duty required to be
performed under this chapter; or
(3) In exercising any duty required to be performed under
this chapter, has not complied with the provisions of this
chapter.
Kona Old, 69 Haw. at 86, 734 P.2d at 165.
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603-21,26 seeking a ruling that the director had violated the
Coastal Zone Management Act (“CZMA”) in issuing a special
management area (“SMA”) minor use permit, and an order voiding
the permit and enjoining an authorized construction of real
property situated within the special management area of KailuaKona.
69 Haw. at 89, 734 P.2d at 166.
We concluded that the
issuance of a SMA minor permit and its enforcement required the
resolution of issues which, under CZMA’s regulatory scheme, had
been placed within the special competence of the county planning
department.
Id. at 93, 734 P.2d at 169.
We held, “the request
for judicial intervention in the administrative process should
not have preceded the resolution by the Board of Appeals of the
question of whether the planning director’s action in issuing the
minor permit was proper.”
Id.
Accordingly, this court applied
the doctrine of primary jurisdiction and affirmed the circuit
court’s dismissal of the case.
Id.
We have similarly applied the doctrine of primary
jurisdiction to claims originally cognizable in the circuit court
but containing issues that first require a determination by an
administrative agency.
See Chun v. Emps. Ret. Sys. of State of
Haw., 73 Haw. 9, 13, 828 P.2d 260, 262 (1992) (holding that the
26
courts.”
“HRS § 603–21 formerly defined the jurisdiction of circuit
Kona Old, 69 Haw. at 89, 734 P.2d at 166.
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considerations of uniformity and consistency in a specialized
agency’s administration of the Employees’ Retirement System,
mandated suspension of the judicial process pending an initial
review of the issues by the administrative body).
See also Jou
v. Nat’l Interstate Ins. Co. of Haw., 114 Hawai#i 122, 128, 157
P.3d 561, 567 (App. 2007) (applying the primary jurisdiction
doctrine and referring the question of whether a workers’
compensation carrier acted unreasonably or in bad faith to the
Director of the Department of Labor and Industrial Relations
before proceeding with a bad faith tort claim in circuit court).
But see Aged Hawaiians v. Hawaiian Homes Comm’n, 78 Hawai#i 192,
202, 891 P.2d 279, 289 (1995) (holding that the doctrine did not
apply where (1) a pure question of law is at issue and technical
matters calling for the special competence of the administrative
expert are not involved; and (2) cases in which the
constitutionality of the agency’s rules and procedures is
challenged and questions are raised as to whether the agency has
acted within the scope of its authority).
Notwithstanding, “[n]o fixed formula exists for
applying the doctrine of primary jurisdiction.
In every case the
question is whether the reasons for the existence of the doctrine
are present and whether the purposes it serves will be aided by
its application in the particular litigation.”
26
Western Pac.
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R.R., 352 U.S. 59, 64.
B.
UPW’s Retaliation Claims
1.
Framework for the Application of the Primary
Jurisdiction Doctrine
As discussed above, this court adopted the doctrine of
primary jurisdiction directly from the United States Supreme
Court’s opinion in Western Pac. R.R., 352 U.S. 59.
The
plaintiffs in Western Pac. R.R. had brought suit in the Court of
Claims under the Tucker Act27 to recover money from the United
States.
352 U.S. at 60 n.1.
The United States Supreme Court was
specifically presented with the question of whether the Court of
Claims had properly applied the doctrine of primary jurisdiction;
that is, whether it had correctly allocated the issues in the
suit between the jurisdictions of the Interstate Commerce
Commission and that of the court.
352 U.S. at 64.
We are
similarly presented in the instant case with the question of
whether the ICA properly applied the doctrine of primary
jurisdiction to UPW’s claims, even when the circuit court had
original jurisdiction over those claims.
Accordingly, the
27
The Tucker Act governed the adjudication of money claims against
the United States. Gregory C. Sisk, The Tapestry Unravels: Statutory Waivers
of Sovereign Immunity and Money Claims Against the United States, 71 Geo.
Wash. L. Rev. 602, 608 (2003). It conferred the Court of Claims jurisdiction
over money claims (other than in tort) based upon federal statutes, executive
regulations, and contract, and also expanded that court’s authority to hear
suits based upon the Constitution. Id. “Moreover, the Tucker Act granted the
then-circuit courts (today the District Courts) concurrent jurisdiction with
the Court of Claims over monetary claims not exceeding $10,000 in amount.”
Id.
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Court’s reasoning in its application of the doctrine is
particularly instructive to the instant case.
In Western Pac. R.R., the Court explained that the
determination of whether a lower court had properly applied the
doctrine of primary jurisdiction required an examination of
whether the Act conferring jurisdiction upon the Interstate
Commerce Commission, the Interstate Commerce Act, required the
agency to first pass on the issue in dispute, which in turn
depended on whether the controversy in dispute raised “issues of
transportation policy which ought to be considered by the
Commission in the interests of a uniform and expert
administration of the regulatory scheme laid down by that Act.”
325 U.S. at 65.
Based on these factors, the Court held that the
issues presented in the claim were initially matters for the
Commission’s determination, even if the suits had been brought
under the Tucker Act, and not the Interstate Commerce Act.
Id.
at 70.
UPW’s retaliation claims are unquestionably cognizable
in the circuit court.
UPW alleges, however, that Defendant
Lingle retaliated against UPW members for filing the Furlough
Lawsuit.
The Furlough Lawsuit was an assertion of the Employees’
right to collective bargaining, alleging that Defendant Lingle
violated collective bargaining laws by unilaterally imposing
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statewide furloughs.
Although UPW’s retaliation claims do not
specifically assert the right to collective bargaining,
prohibited practice claims under HRS § 89-13 nevertheless appear
to be implicated by virtue of UPW’s allegation that Defendants
implemented the layoffs in retaliation for the Furlough Lawsuit.
An examination of the law governing the HLRB’s
jurisdiction under HRS Chapter 89, therefore, is necessary to
determine whether the doctrine of primary jurisdiction applies.
Specifically, HRS Chapter 89 must be examined to determine
whether it requires the HLRB to first pass on the controversy,
which in turn depends on whether the controversy raises policy
issues concerning matters that ought to be considered by the HLRB
in the interests of a uniform and expert administration of the
regulatory scheme laid down by HRS Chapter 89.
a.
The Regulatory Scheme of HRS Chapter 89,
Collective Bargaining in Public Employment
HRS Chapter 89 is titled “Collective Bargaining in
Public Employment.”
HRS § 89-1(a) outlines the following
legislative findings:
[J]oint decision-making is the modern way of administering
government. Where public employees have been granted the
right to share in the decision-making process affecting
wages and working conditions, they have become more
responsive and better able to exchange ideas and information
on operations with their administrators. Accordingly,
government is made more effective. The legislature further
finds that the enactment of positive legislation
establishing guidelines for public employment relations is
the best way to harness and direct the energies of public
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employees eager to have a voice in determining their
conditions of work; to provide a rational method for dealing
with disputes and work stoppages; and to maintain a
favorable political and social environment.
HRS § 89-1(a).
HRS § 89-1(b) states in part, “it is the
public policy of the State to promote harmonious and
cooperative relations between government and its employees
and to protect the public by assuring effective and orderly
operations of government.”
HRS § 89-1(b).
HRS § 89-1(b)
also notes that this policy is best effectuated by:
(1) Recognizing the right of public employees to organize
for the purpose of collective bargaining; (2) Requiring
public employers to negotiate with and enter into written
agreements with exclusive representatives on matters of
wages, hours, and other conditions of employment, while, at
the same time, maintaining the merit principle pursuant to
section 76-1; and (3) Creating a labor relations board to
administer the provisions of chapters 89 and 377.
The Committee on Human Resources explained that the
legislature had created the HLRB, formerly the Hawai#i Public
Employment Relations Board, “to administer the provisions of
Chapter 89 in an effort to promote cooperative relations between
the government and its employees and to protect the public by
ensuring orderly government operations.”
HGEA, 124 Hawai#i at
204, 239 P.3d at 8 (citing S. Stand. Comm. Rep. No. 597–82, in
1982 Senate Journal, at 1202).
Thus, the policy motivating
Chapter 89 was the promotion of cooperative relations between
government and its employees, and the HLRB was specifically
created to administer this policy.
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The retaliation claims in the instant case clearly
involve relations between the government and its public sector
employees.
The crux of UPW’s allegation is that, because it
exercised its right to collective bargaining by filing a lawsuit
opposing unilateral statewide furloughs, Defendants retaliated
against UPW members by laying off these members.
If UPW’s
allegations are true, Defendants have violated the employees’
right to collectively bargain by retaliating against them for
asserting such rights by filing the Furlough Lawsuit.
HRS
Chapter 89 specifically protects the rights of public employees
to exercise collective bargaining.
Pursuant to HRS § 89-1, the
HLRB was created to administer the provisions of Chapter 89.
In addition, HRS § 89-14 specifically supports the
conclusion that UPW’s retaliation claims raise issues of public
employment policy that ought to be considered by the HLRB.
As we
explained in HGEA, HRS § 89-14 was amended in 1982 in response to
the ICA opinion in Winslow v. State, 2 Haw. App. 50, 625 P.2d
1046 (1981), which conferred concurrent jurisdiction to the HLRB
and circuit court over public employee prohibited practice
complaints.
124 Hawai#i at 203, 239 P.3d at 7.
The legislature
explained that the purpose of the bill was to make the
jurisdiction of the HLRB exclusive in controversies relating to
prohibited practices.
S. Stand. Comm. Rep. No. 597-82, in 1982
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Senate Journal, at 1202.
In a Report issued by the Committee on
Public Employment and Government Operations, the committee
explained that the phrase, “exclusive original jurisdiction” may
also be referred to as “exclusive primary or initial
jurisdiction.”
H. Stand. Comm. Rep. No. 134-87, in 1982 House
Journal, at 944.
The committee explained that under the bill as
amended:
[A] person with a prohibited practice complaint must first
file with the HLRB which would then conduct proceedings on
the complaint and issue a decision or order. The
complainant would not have the option of either filing the
prohibited practice complaint with HLRB or in the circuit
court or of filing the same complaint concurrently with both
the HRLB and the court.
Id.
In the report issued by the Committee on Human Resources,
the committee stated that it believed that the original intent of
HRS § 89-14 was to allow the HLRB to have primary jurisdiction of
prohibited practice complaints because the HLRB was “the
administrative agency with the expertise in public employment
relations.”28
S. Stand. Comm. Rep. N. 597-82, in 1982 House
Journal, at 1202 (emphasis added).
Accordingly, as amended, HRS § 89-14 provides: “Any
controversy concerning prohibited practices may be submitted to
the board in the same manner and with the same effect as provided
28
We recognize that the legislature’s use of the term “primary” in
connection with the term “jurisdiction” is not synonymous with the primary
jurisdiction doctrine. The legislature’s use of the term was clearly intended
to confer the HLRB with “exclusive original jurisdiction” over prohibited
practice complaints.
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in section 377-9; provided that the board shall have exclusive
original jurisdiction over such a controversy[.]”
Thus, HRS
§ 89-14 expressly requires that the HLRB first pass on prohibited
practice controversies.
UPW alleges that Defendants violated the HWPA by
retaliating against UPW and its members for filing and pursuing
the Furlough Lawsuit in circuit court.
Pursuant to HRS § 89-
13(a)(4), it is a prohibited practice to: “Discharge or otherwise
discriminate against an employee because the employee has signed
or filed an affidavit, petition, or complaint or given any
information or testimony under this chapter, or because the
employee has informed, joined, or chosen to be represented by any
employee organization.”
Viewing UPW’s allegations in light of
HRS § 89-13(a)(4), UPW essentially presents a prohibited practice
controversy.
Thus, UPW’s retaliation claims raise issues of public
employment policy that ought to be considered by the HLRB in the
interest of a uniform and expert administration of the regulatory
scheme laid down by HRS Chapter 89.
Moreover, the legislature
explicitly conferred exclusive or “initial jurisdiction” to the
HLRB over prohibited practices, such as discharging employees for
filing complaints, because it recognized that the HLRB possessed
expertise in matters concerning public employment.
33
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HRS Chapter 89 requires the HLRB to first pass on UPW’s
retaliation claim, thus triggering the primary jurisdiction
doctrine.
b.
The ICA Properly Applied the Primary Jurisdiction
Doctrine to UPW’s Retaliation Claims
The circuit court has original jurisdiction over UPW’s
HWPA and Free Speech retaliation claims, and therefore, UPW has a
right to pursue claims under these laws.
Based on the reasons
above, however, we hold that the primary jurisdiction doctrine is
applicable to UPW’s retaliation claims.
Thus, pursuant to Kona
Old, UPW’s right to have these claims considered by the courts
yields to the overriding policy promoted by the doctrine of
primary jurisdiction.
69 Haw. at 93, 734 P.2d at 168 (citing B.
Schwartz, Administrative Law § 8.24, at 488 (2nd ed. 1984)).
The mere fact that the issues were phrased in UPW’s
complaint as HWPA and free speech claims are not determinative on
this issue.
See Western Pac. R.R., 352 U.S. at 68-69 (“[T]he
mere fact that the issue is phrased in one instance as a matter
of tariff construction and in the other as a matter of
reasonableness should not be determinative on the jurisdictional
issue.”).
As the United States Supreme Court stated, such would
make the doctrine of primary jurisdiction an “abstraction to be
called into operation at the whim of the pleader.”
59.
34
352 U.S. at
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The United States Supreme Court expressly rejected such
an approach in General American Tank, when it held that, while
the action was an ordinary one in assumpsit on a written
contract,
“[w]hen it appeared in the course of the litigation
that an administrative problem, committed to the Commission, was
involved, the court should have stayed its hand pending the
Commission’s determination[.]”
308 U.S. at 433.
The Court
concluded that the policy of the Act was that reasonable
allowances and practices were to be fixed and settled after full
investigation by the Commission.
Id. at 432-33.
Thus, the Court
held that although the District Court had jurisdiction of the
subject matter and of the parties, the issues before the District
Court, the reasonableness and legality of the practices of the
parties, raised questions that were subjected by the Interstate
Commerce Act to the administrative authority of the Interstate
Commerce Commission.
Id.
The dissent argues that it is well-established that the
agency and the court must have concurrent jurisdiction over a
claim in order for the primary jurisdiction doctrine to apply.
Dissenting Opinion at 10 (citing Aged Hawaiians, 78 Hawai#i at
202, 891 P.2d at 289).
Respectfully, we disagree.
The primary
jurisdiction doctrine does not presume that a claim must be
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originally cognizable by both the court and the agency.
The
agency and the court need not have concurrent jurisdiction over
the claims, as long as the agency and the court have concurrent
jurisdiction over issues presented in the claims.
In Aged
Hawaiians and in Kona Old, we held that the doctrine of primary
jurisdiction applies “where a claim is originally cognizable in
the courts, and comes into play whenever enforcement of the claim
requires the resolution of issues which, under a regulatory
scheme, have been placed within the special competence of an
administrative body.”
Aged Hawaiians, 78 Hawai#i at 202, 891
P.2d at 289; Kona Old, 69 Haw. at 93, 734 P.2d at 168-69
(emphasis added).
Accordingly, we recognized that the emphasis
in the application of the doctrine of primary jurisdiction was on
the issues raised by the claim, rather than the claim itself.
The retaliation allegations in UPW’s complaint provide
a basis for both a prohibited practice claim and claims under the
HWPA and Free Speech Clause; however, one issue is determinative
of all these claims, namely, whether Defendants’ decision to lay
off government employees was motivated by the Furlough Lawsuit.
Thus, the question of whether Defendants violated the HWPA and
Free Speech Clause are inextricably intertwined with the question
of whether Defendants engaged in a HRS § 89-13(a)(4) prohibited
practice.
Under these circumstances, we conclude that the HLRB
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must be the first to pass on the motivations for Defendants’
decision to implement the layoffs.
Cf. In re United Pub.
Workers, 131 Hawai#i 142, 315 P.3d 768, 777 (App. 2013) (“The
HLRB’s jurisdiction clearly extends to determining whether, in a
particular instance, specified employer conduct constitutes a
‘prohibited practice’ under HRS § 89–13.”).
This is consistent with the reasons for the existence
of the primary jurisdiction doctrine, avoiding the risk of
divergent decisions between an administrative agency and a court
on certain administrative questions.
Moreover, it is consistent
with the purposes the primary jurisdiction doctrine serves, that
of (1) uniformity which would obtain if a specialized agency
initially passed on certain types of administrative questions,
and (2) deference to the expert and specialized knowledge of
administrative agencies specifically created by the legislature
for regulating certain subject matter.
Thus, as stated in
Western Pac. R.R., 352 U.S. at 64-65:
Uniformity and consistency in the regulation of business
entrusted to a particular agency are secured, and the
limited functions of review by the judiciary are more
rationally exercised, by preliminary resort for ascertaining
and interpreting the circumstances underlying legal issues
to agencies that are better equipped than courts by
specialization, by insight gained through experience, and by
more flexible procedure .
(Citing Far East Conference, 342 U.S. at 574-75).
The regulatory scheme laid down by HRS Chapter 89
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specifically contemplates that issues concerning governmental and
employee relations ought to be considered by the HLRB in the
interest of uniform and expert administration.
Moreover,
HRS § 89-14 expressly requires that the HLRB first pass on the
issues presented in UPW’s complaint because UPW’s allegations
raise a prohibited practice controversy.
Accordingly, we hold that the ICA properly applied the
doctrine of primary jurisdiction to UPW’s retaliation claims.
2.
A Stay Is Appropriate Under the Circumstances
Under the doctrine of primary jurisdiction, a court has
discretion either to retain jurisdiction or, if the parties would
not be unfairly disadvantaged, to dismiss the case without
prejudice.
Reiter v. Cooper, 507 U.S. 258, 268-69 (1993).
In Reiter, the United States Supreme Court rejected the
defendant’s argument that the primary jurisdiction doctrine
required plaintiffs to initially present their claims to the
administrative agency, rather than the court.
507 U.S. at 268.
On the contrary, the Court held that the doctrine was
specifically applicable to “claims properly cognizable in court
that contain some issue within the special competence of an
administrative agency.
It requires the court to enable a
‘referral’ to the agency, staying further proceedings so as to
give the parties reasonable opportunity to seek an administrative
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ruling.”
Id.
The Court further held that “[r]eferral of the
issue to the administrative agency does not deprive the court of
jurisdiction; it has discretion either to retain jurisdiction or,
if the parties would not be unfairly disadvantaged, to dismiss
the case without prejudice.”
Id. at 268-69.
The dissent states that our conclusion that UPW’s
retaliation claims concerns prohibited practices conflicts with
our conclusion that the court may decide whether to stay or
dismiss the action because HRS § 89-14 expressly provides that
the HLRB has “exclusive original jurisdiction” over prohibited
practices.
See Dissenting Opinion at 23.
As discussed supra,
application of the primary jurisdiction was necessary because
UPW’s claims were brought under the HWPA and the Hawai#i
Constitution over which the circuit court has jurisdiction.
Subsumed within these claims, however, were prohibited practice
controversies; therefore, under HRS Chapter 89’s regulatory
scheme, the HLRB was required to make an initial determination
before the circuit court could adjudicate claims over which it
has jurisdiction.
In the instant case, the ICA concluded that UPW’s First
Circuit Complaint alleged that Defendants had essentially engaged
in prohibited practices by implementing the layoffs and
privatization, but that UPW’s statutory claims could be raised
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directly in the circuit court.
The ICA held, therefore, that
pursuant to the primary jurisdiction doctrine, a stay rather than
a dismissal of UPW’s claims was appropriate because the statute
of limitations could prevent UPW from refiling its claims at the
conclusion of the HLRB’s proceedings.
As to UPW’s retaliation
claims, we agree.
Therefore, we affirm the ICA’s judgment staying UPW’s
retaliation claims pending the outcome of the administrative
process.
C.
UPW’s Privatization Claims
UPW alleged in its First Circuit Complaint that
Defendants privatized public work in violation of civil service
merit principles protected by article XVI, section 1 of the
Hawai#i Constitution and Hawaii’s civil service laws, HRS
Chapters 76 and 77,29 “by contracting out civil service work –
for example, work at the Kulani Correctional Facility – to
private companies at the same time that public employees who were
available to perform that work were being subjected to layoffs.”
UPW asserts in its Application that in Konno, 85 Hawai#i 61, 937
P.2d 397, this court “expressed no doubt that these claims were
properly cognizable in an original suit before the circuit
court.”
29
UPW argues, therefore, that the ICA erred in concluding
HRS Chapter 77 was repealed in its entirety in 2000 by Act 253.
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that UPW’s privatization claims, which UPW asserts are identical
to the claim brought in Konno, contained issues within the
specialized expertise of the HLRB.
1.
Hawaii’s Civil Service Laws
In Konno, the central issue was the privatization of
public services, namely the validity of a contract entered into
by the County of Hawai#i to privatize the operation of a
landfill.
85 Hawai#i 61, 64, 937 P.2d 397, 400.
We held that
the County violated civil service laws and merit principles but
had not violated collective bargaining laws.
Id.
We explained in Konno that article XVI, section 1 of
the Hawai#i Constitution provides, “[t]he employment of persons
in the civil service, as defined by law, of or under the State,
shall be governed by the merit principle.”
We concluded that by
its express terms, article XVI, section 1 simply means that
“civil service,” however defined, was to be governed by merit
principles.
85 Hawai#i 61, 70, 937 P.2d 397, 406.
We stated,
however, that article XVI, section 1 of the Hawai#i Constitution
did not define the precise scope of the civil service, i.e., the
particular job positions that are within civil service.
We
explained: “Instead, article XVI, section 1 expressly refers to
other sources for a definition of ‘civil service.’
41
It states:
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‘civil service, as defined by law . . . .’”
Id. (emphasis in
original) (ellipsis in original).
We held that in order to determine the scope of the
term “civil service,” statutory and case law had to be examined;
therefore, the constitution did not establish an independently
enforceable right to the protection of merit principles.
We
concluded, however, that civil service positions were also
subject to the civil service statutes contained within HRS
Chapters 76 and 77.
85 Hawai#i 61, 70, 937 P.2d 397, 406 (1997).
Thus, we concluded that HRS Chapters 76 and 77 provided civil
servants with an enforceable right to the protection of merit
principles guaranteed by article XVI, section 1 of the Hawai#i
constitution.
We then concluded that under HRS § 76-77,30 landfill
worker positions were within the civil service under the “nature
of the services test.”31
85 Hawai#i at 74, 937 P.2d at 410.
Accordingly, we held that the County violated civil service laws
and merit principles, and instructed the circuit court to fashion
30
HRS § 76-77 states in relevant part: “The civil service to which
this part applies comprises all positions in the public service of each
county, now existing or hereafter established, and embraces all personal
services performed for each county . . . [.]” HRS § 76-77 then lists a number
of exemptions to these civil service positions.
31
According to this approach, “services that have been ‘customarily
and historically provided by civil servants’ cannot be privatized, absent a
showing that civil servants cannot provide those services.” Konno, 85 Hawai #i
at 69, 937 P.2d at 405 (citing Wash. Fed’n of State Emps., AFL-CIO v. Spokane
Cmty Coll., 90 Wash.2d 698, 585 P.2d 474, 477 (Wash. 1978) (en banc)).
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injunctive relief requiring the landfill to be transferred from
private to County operation, and also to monitor the transition
and impose sanctions for non-compliance.
415.
Id. at 79, 937 P.2d at
We expressed no doubt that the issues raised in the
privatization claims were within the original jurisdiction of the
circuit court, and not the HLRB.
At the time Konno was decided, HRS § 76-1 (1985) stated
that it was the policy of the State that the personnel system be
applied and administered in accordance with certain merit
principles.32
Act 253 of 2000 (“Act 253”) repealed numerous
sections of HRS Chapter 76 and repealed Chapter 77 in its
entirety.
In addition, Act 253 established a Merit Appeals Board
32
HRS § 76-1 (1985), before it was amended, provided the following
merit principles:
(1) Equal opportunity for all regardless of race, sex, age,
religion, color, ancestry, or politics. No person shall be
discriminated against in any case because of any disability,
in examination, appointment, reinstatement, reemployment,
promotion, transfer, demotion, or removal, with respect to
any position the duties of which, in the opinion of the
director of human resources development may be efficiently
performed by a person with such a disability; provided that
the employment will not be hazardous to the appointee or
endanger the health or safety of the appointee's co-workers
or others;
(2) Impartial selection of the ablest person for government
service by means of competitive tests which are fair,
objective, and practical;
(3) Just opportunity for competent employees to be promoted
within the service;
(4) Reasonable job security for the competent employee,
including the right of appeal from personnel actions;
(5) Systematic classification of all positions through
adequate job evaluations; and
(6) Proper balance in employer-employee relations between
the people as the employer and employees as the individual
citizens, to achieve a well-trained, productive, and happy
working force.
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(“MAB”) and amended the definition of “merit principle” in HRS
§ 76-1.
HRS § 76-1, as amended, defines the merit principle as
“the selection of persons based on their fitness and ability for
public employment and the retention of employees based on their
demonstrated appropriate conduct and productive performance.”
HRS § 76-1 (Supp. 2000).
Defendants argue that after the enactment of Act 253,
UPW and the State have apparently argued over “whether original
jurisdiction over claimed violations of HRS § 76-16(b),[33] as it
relates to contracting out claims[34] rests with the HLRB
pursuant to HRS §§ 89-5 and 89-9(d), or with the various merit
appeals boards pursuant to HRS §§ 76-16(a),[35] 76-14(a), (b) and
33
HRS § 76-16(b) is the State counterpart to HRS § 76-77, the
statute governing civil service positions in the county, as interpreted in
Konno, 85 Hawai #i 61, 937 P.2d 397. HRS § 76-16(b) states: “The civil service
to which this chapter applies shall comprise all positions in the State now
existing or hereafter established and embrace all personal services performed
for the State . . . [.]” HRS § 76-16(b) then provides a number of exemptions
to these civil service positions, none of which apply here.
34
Defendants use the term “contracting out” claims interchangeably
with “privatization” claims.
35
HRS § 76-16(a) states:
(a) The state constitution mandates that the employment of
persons in the civil service, as defined by law, be governed
by the merit principle. The legislature declares that the
public policy of the State is that all positions in the
civil service systems of the respective jurisdictions shall
be filled through civil service recruitment procedures based
on merit and that the civil service system of the respective
jurisdictions shall comprise all positions, whether
permanent or temporary, in the jurisdiction now existing or
hereafter established and embrace all personal services
performed for the jurisdiction, except employees or
positions exempted under this section, or sections 46-33 and
76-77.
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(e),[36] and 76-47.”37
Accordingly, we address whether UPW’s
privatization claims require the resolution of issues placed
within the special competence of either the HLRB or the MAB.
2.
Civil Service Laws Do Not Require Privatization Claims
to be Determined by the HLRB
HRS § 89-5(a) (2012) states that the HLRB was created
to ensure that (1) collective bargaining is conducted in
accordance with HRS Chapter 89, and (2) the merit principle under
HRS § 76-1 is maintained.
However, we concluded in Konno that,
pursuant to HRS § 89-9(d), “The employer and the exclusive
representative shall not agree to any proposal which would be
inconsistent with the merit principle[.]”
Thus, we held that the
County and UPW were barred from bargaining over both the
privatization decision and its effects because we concluded that
County’s privatization effort violated civil service laws and
merit principles.
85 Hawai#i at 78, 937 P.2d at 414 (“It would
be absurd for us to hold that the County violated collective
bargaining laws by refusing to negotiate with the UPW when both
parties were expressly barred from negotiating [the County’s
privatization effort] by statute.”).
36
HRS § 76-14 provides the duties and the jurisdiction of the MAB.
37
HRS § 76-47 provides the appointment, authority, and the
procedures of the MAB.
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The HLRB, therefore, only has jurisdiction over issues
related to HRS Chapter 89, such as collective bargaining and
prohibited practice controversies, to the extent they do not
violate merit principles.
UPW alleged in its First Circuit
Complaint that Defendants unlawfully abolished civil service
positions and contracted out positions that have historically and
customarily been performed by civil servants under the merit
system.
These allegations may constitute violations of civil
service laws and merit principles.
Pursuant to Konno and HRS
§ 89-9(d), UPW and Defendants were expressly barred from
bargaining over either the decision to privatize or its effect if
privatization violated civil service laws or merit principles.
Thus, the question of whether privatization violated civil
service laws and merit principles is a threshold question that
must be determined by the circuit court before the HLRB’s
specialized expertise in addressing prohibited practices is
implicated.
Moreover, the purpose of Act 253 was “to reform the
public employment laws that were enacted to implement two
constitutional mandates -- that there be civil service based on
merit and that public employees have the right to bargain
collectively.”
2000 Haw. Sess. L. Act 253, § 1 at 853.
Act 253
sought to repeal Hawaii’s civil service and collective bargaining
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laws and to create a new comprehensive public employment law.
S.
Stand. Comm. Rep. No. 2686, in 2000 Senate Journal, at 1104.
The
Joint Labor and Environmental and Ways and Means Standing
Committee Report states: “Public employment is governed by two
often contradictory set of laws – those for civil service and
those for collective bargaining.
While these laws once clearly
delineated the difference between the two, changes over many
years have blurred the lines of responsibility and authority.”
Id.
The report further states “that one of the keys to
successful modernization and a more responsive, adaptive
government, is to restore the ‘bright line’ – the clear
delineation between civil service and collective bargaining.”
Id.
Thus, the legislative history of Act 253 reflects an intent
to distinguish issues related to civil service and merit
principles from collective bargaining.
Therefore, we hold that HRS Chapter 89 does not require
that the HLRB first pass on controversies related to
privatization.
The ICA erred in staying UPW’s privatization
claims to pursue administrative remedies before the HLRB under
the primary jurisdiction doctrine.38
38
Defendants argue that UPW’s privatization claims are within the
HLRB’s jurisdiction because the claims were bound up with its central claim
that Lingle was retaliating against UPW members. Defendants also argue that
UPW is alleging that Lingle was privatizing civil service positions in
retaliation for the Furlough Lawsuit. In Konno, plaintiffs also argued that
the privatization of the landfill was to “punish” the plaintiffs for endorsing
(continued...)
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3.
The Merit Appeals Board’s Jurisdiction Over Civil
Service Laws
Defendants also argue that original jurisdiction over
claimed violations of HRS § 76-16 as it relates to “contracting
out claims” rests with the HLRB or in the alternative, the
various merit appeals boards pursuant HRS §§ 76-14, 76-16, and
76-47.
This assertion lacks merit.
HRS § 76-47 requires that each jurisdiction39
“establish a merit appeals board that shall have exclusive
authority to hear and decide appeals relating to matters set
forth in section 76-14 concerning the civil service of the
jurisdiction.”
HRS § 76-14 then provides in relevant part:
§ 76-14. Merit appeals board;
duties, and jurisdiction
(a) The merit appeals board of each jurisdiction shall
decide appeals from any action under this chapter taken by
the chief executive, the director, an appointing authority,
or a designee acting on behalf of one of these individuals,
relating to:
(1) Recruitment and examination;
(2) Classification and reclassification of a particular
38
(...continued)
former Mayor Inouye in the 1992 primary election. 85 Hawai #i at 74 n.10, 937
P.2d at 410 n.10. We concluded that the County violated constitutionally
mandated merit principles and civil service statutes; therefore, it was
unnecessary for us to address this argument. Similarly, in this case, the
court may resolve UPW’s claim that Defendants’ privatization actions violated
merit principles and civil service laws without having to make a determination
on the issue of retaliation. However, if the court concludes that the
privatization is not in violation of merit principles or civil service laws,
any retaliation allegations would appear to implicate the HLRB's specialized
expertise in addressing prohibited practices.
39
“Jurisdiction” is defined by HRS § 76-11 to mean “the State, the
city and county of Honolulu, the county of Hawaii, the county of Maui, the
county of Kauai, the judiciary, the department of education, the University of
Hawaii, and the Hawaii health systems corporation.”
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position, including denial or loss of promotional
opportunity or demotion due to reclassification of positions
in a reorganization;
(3) Initial pricing of classes; and
(4) Other employment actions under this chapter, including
disciplinary actions and adverse actions for failure to meet
performance requirements, taken against civil service
employees who are excluded from collective bargaining
coverage under section 89-6.
(b) Any person suffering legal wrong by an action under
subsection (a)(1) or aggrieved by such action shall be
entitled to appeal to the merit appeals board. Any employee
covered by chapter 76 suffering legal wrong by an action
under subsection (a)(2) or (3) shall be entitled to appeal
to the merit appeals board. Only employees covered by
chapter 76, who are excluded from collective bargaining,
suffering legal wrong by an action under subsection (a)(4)
shall be entitled to appeal to the merit appeals board.
Appeals under this section shall be filed within time limits
and in the manner provided by rules of the merit appeals
board.
Although “any person” can appeal HRS § 76-14(a)(1) “recruitment
and examination” issues to a MAB under HRS § 76-14(b)(1), only
“employees” can bring appeals under subsections (a)(2) to (a)(4),
and UPW is not an employee.
In any event, privatization issues
do not relate to “recruitment and examination.”
In addition, privatization does not relate to
“classification and reclassification of a particular position,
including denial or loss of promotional opportunity or demotion
due to reclassification of positions in a reorganization,” or
“initial pricing of classes” under HRS §§ 76-14(a)(2) and (a)(3).
Even if privatization could, under HRS § 76-14(a)(4), be
characterized as “other employment actions under this chapter,
including disciplinary actions and adverse actions for failure to
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meet performance requirements, taken against civil service
employees who are excluded from collective bargaining coverage
under section 89-6,” this is an issue we need not and do not
address.
This is because UPW would not be able to bring
privatization claims under HRS §§ 76-16, 76-14, or 76-47 to a
merit appeals board because under HRS § 76-14(b), claims under
HRS § 76-14(a)(4) can only be brought by “employees covered by
chapter 76, who are excluded from collective bargaining.”
(Emphasis added).
HRS § 76-11 provides that an “‘Employee’ or
‘public employee’ means any person holding a position in the
service of a jurisdiction, irrespective of status or type of
appointment;
provided that, if the context clearly applies only
to an employee who is a member of the civil service, ‘employee’
means a civil service employee.”
To repeat, UPW is not an
“employee.”
Finally, HRS § 76-16 requires all positions in the
civil service systems be filled through civil service recruitment
procedure based on merit principles, and includes public
employees within civil service unless specifically excluded or
exempted; however, it contains no reference to the merit appeals
boards.
Having determined that UPW’s privatization claims are
not subject to HRS § 76-14, Defendants’ alternate argument that
the primary jurisdiction doctrine requires referral of UPW’s
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privatization claims to Chapter 76 merit appeals board is devoid
of merit.
IV.
Conclusion
We hold that the primary jurisdiction doctrine was
applicable to UPW’s retaliation claims because the claims
required the resolution of issues that have been placed within
the special competence of the HLRB under HRS Chapter 89’s
regulatory scheme.
In addition, we hold that a stay, rather than
a dismissal, was appropriate under the circumstances.
We also hold that the primary jurisdiction doctrine was
not applicable to UPW’s privatization claims because they did not
contain any issues which, under Hawaii’s collective bargaining
and civil service laws, had been placed within the specialized
competence of either the HLRB or the MAB.
Therefore, the circuit
court erred in dismissing UPW’s privatization claims, and the ICA
erred in referring the claims to the HLRB.
Accordingly, we affirm the ICA’s judgment on appeal to
the extent that it vacated the circuit court’s order dismissing
UPW’s complaint, and agree with the ICA’s remand instructions to
the extent that it ordered the circuit court to stay UPW’s
retaliation claims pursuant to the primary jurisdiction doctrine.
We disagree, however, that the primary jurisdiction doctrine
applies to UPW’s privatization claims, and therefore, instruct
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the circuit court to proceed with the privatization claims
consistent with this opinion.
Rebecca Covert,
Herbert R. Takahashi,
and Davina W. Lam,
for petitioner
/s/ Mark E. Recktenwald
/s/ Paula A. Nakayama
/s/ Sabrina S. McKenna
Richard H. Thomason,
for respondent
52
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